11 July 2008: Oil peaks at $147 a barrel
Crude oil hit an intraday record of $147.27 a barrel as traders bet that demand from China and India would keep prices climbing forever. Pundits floated $200. Instead, the financial crisis crushed demand, and by Christmas oil had collapsed below $40. Anyone who extrapolated the trend in July learned how quickly a commodity can go from scarce to surplus once the economy changes direction.
The lesson: Commodity prices that seem destined to rise forever usually cure themselves by killing demand.
What it meant for investors
$1,000 in Crude oil (barrel) at the start of 2008 → $684 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2008, the year it happened. That is a loss of $316, while a plain index fund over the same years made $3,626.
What Crude oil (barrel) teaches: You cannot easily own oil itself, only futures contracts; the negative print of April 2020 showed that storage and contract mechanics can dominate supply and demand.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2008 | $95.00 | $684 | $4,626 |
| 2010 | $80.00 | $812 | $6,071 |
| 2012 | $100 | $650 | $5,312 |
green = beat the S&P 500 · red = lost money
What if you bought Crude oil (barrel)? Every starting year and the full story →
More Crude oil (barrel) history
- 17 January 1991: Oil collapses as Desert Storm begins
- 20 March 2003: The Iraq War begins
- 20 April 2020: US oil prices go negative
- 29 August 2005: Hurricane Katrina hits the Gulf Coast
- 17 October 1973: Arab oil producers wield the oil weapon
- 26 November 2021: Omicron spoils Black Friday
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
Play Sixty-40